How to Start a Tech Startup
Today we tapped into the brilliant mind of John Morrow, a serial entrepreneur, and one of the best disruptive technology consultants the Southeast has to offer…to give us simple insight into how to start a tech startup. And what I really loved about this interview, was John told us what he did different…before he actually started his startup.
John’s Startup Story
I sat down at a local coffee shop with John in St. Petersburg, Florida; he greeted me with a hug, and asked how my business was going. As we get started with the interview, his face turns red as he puts his head down, “I’m shy” he tells me. John’s humble nature & modesty truly shines. Founders walk in and out of the coffee shop, one returning from New Zealand, and John is greeted with more hugs. On the outside, it seems like he may be any ordinary guy…unless you know him personally that is. John is not only one of the best experts in this field, but he was also one of our mentors at the Gazelle Lab (part of Tech Stars), Entrepreneur-in-Residence at USF SP, and owns Morrow Consultants.
John was raised in a family of entrepreneurs, and his own experience has been tested through years of major shifts in the technology field. His journey starting his first real technology startup began at the young age of 20, the forefront of trends, getting his first idea from a magazine about microprocessors. But John says “Even as a kid I was always trying to start mini-businesses: lemonade stands, etc”. By the age of 25 John was selling his products to NASA after being introduced through a connection. By the age of just 28, John had sold his first company. Since then, John continued to go back to entrepreneurship. “I found the successful businesses I started always referred to an earlier obsession or passion I had in life”.
So I asked John to take us back to starting his first startup. How did he do it? And what tips could he give us based on his own experiences?
1. Don’t Make a Business Plan Yet
John puts it to us like this: “If you’re about to launch a new type of toilet paper as a product, when you are already own a toilet paper company…then you can write a business plan. But if you’re out to invent something new, or do something different, the facts you need to write that business plan…don’t exist yet. Only your assumptions exist. In my case, I had no clue who my customers were. I just set out to do it.” What does John recommend? “A business model.”
2. Create a List of Assumptions
John says “one of the greatest skills you can develop is enough awareness to distinguish between what’s an assumption and what’s a fact”. He recommends to write a list of assumptions, with the full understanding they are purely assumptions. “Think of it like a to-do list. The entrepreneurs job is to prove these assumptions are true. You have great intuition, but you just can’t act on this intuition (unless you’re in immediate danger). You stand a greater chance at success if you test it”.
3. Invest as little as possible
Set out to prove assumptions (Also known as proof of concept); with as little time and resources possible. I asked John to go a little more indepth on this, and he says the reason for investing next to nothing when you start a startup, is because the risk levels are so high. At least half of your assumptions will turn out to be false, also known as a pivot.
4. Create a MVP (mimimum viable product)
This can also be called a prototype. John shares a story of his first prototype: “How did I create my prototype? Let’s see…I drew a picture of my concept on a poster, and set it up at the tradeshow. My hand drawn product was sitting next to commercial ready products, and that picture won 1st place at the trade show. All it really takes to test a concept is a picture”.
5. Borrow Money & Keep Innovating
Where did John go next? He borrowed money from family, then angel investors. “Here it gets a little more complicated. Have an investor grade financial package ready to go, one made for startups, EZ Numbers is a good one”.
John also stresses the importance of reaching out for help during this phase, and reminds us how lucky our generation is: “when I was doing it, it was really hard to find mentors and any kind of support. So take advantage of the resources available to you”.
Eventually, John says his business model changed somewhat, but never moved completely away from what he set out to do. “My microprocessor business started doing more corporate services/training to companies like DuPont, because the product was so new”, he recalls.
John’s personal tips for how to start a tech startup:
“Just get out there and do it. You’re going to feel really weird, but be genuine, be relaxed….and you’ll see it was just a battle in your own head.”